Physician Payment Plan Stirs Concern Over Reform Efforts

"An Obama administration plan to cut Medicare payments to heart and cancer doctors by $1.4 billion next year is generating a backlash that's undermining the president's health-care overhaul," Bloomberg reports. The news service says specialists "are waging what one advocate calls a 'tooth and nail' fight" against a proposal "to boost the pay of family doctors, and cut fees for cardiologists and oncologists. The specialists, in newspaper columns and meetings with lawmakers, say patients will lose access to life-saving care, from pacemakers to chemotherapy."

"The proposal by Medicare, the government insurer for the elderly and disabled, is an effort by Obama to focus U.S. medicine on preventive care. The fight by physicians who work with the most expensive patients is weakening support for Obama's broader goal, legislation to remake the health system, said Mark B. McClellan, 46, a former Medicare chief" (Nussbaum and Rapaport, 8/28).

Meanwhile, CNNMoney reports on four key hidden costs to the health care system, including the physician shortage. "Today, America is suffering from a painful doctor shortage that is another legacy of poor regulation. And it will get worse. The population of new doctors who go into practice each year is governed by the number of residency slots in America's teaching hospitals. Incredibly, those positions have been frozen for 25 years at around 25,000 as demand has soared."

"The reason the residency positions haven't grown with the market is that they're funded by Medicare, which has decided it's good public policy to keep the supply of new doctors essentially fixed. The theory is that adding to their numbers would increase costs, since more doctors artificially increase demand by ordering more tests and procedures. That policy has clearly failed. ... One solution is to rapidly increase the number of residency positions, which is not part of the Obama plan. ... Another way to increase supply is to loosen licensing and supervision laws for non-physician providers such as Nurse Practitioners" (Tully, 8/27).

This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.